Question for tax gurus

[Jogeephus]

Theoretically speaking, lets just say someone found themselves muddling through the tax code and found where Dotgov had interjected some of their subtle social engineering into the existing tax code. Then let's say you found that this social engineering cross-threaded itself against what was commonly understood in the past and changes how things can now be calculated. Using this "new" definition opens the door for you to expense costs far exceeding what was customary in the past. In fact, in most cases - when you use the "new" politically correct definition - you would almost be given a limitless number of times you can raise your deduction limit - assuming a few minor and easily documented things are done. Running some numbers I was able to eliminate all taxes in one particular situation. Granted this would not apply to every situation but a reduction of income taxes by 50% should not be a problem.

Assuming all this can be easily documented and fully meets the definition in the tax code would you feel comfortable exploiting this to the fullest even though you know they surely didn't mean to word it the way they did - but it IS? And its more PC.

 

[Bigfoot]

Not sure what you are talking about, but I want in.

 

[MO_cows]

Heck yes, use it. They use everything written into the code that goes against you! You are playing their game by their rules, if they left a hole go right ahead and dance thru it.

 

[wacocowboy]

Dang Jo I didn't know you knew Chinese

 

[boondocks]

Theoretically speaking, lets just say someone found themselves muddling through the tax code and found where Dotgov had interjected some of their subtle social engineering into the existing tax code. Then let's say you found that this social engineering cross-threaded itself against what was commonly understood in the past and changes how things can now be calculated. Using this "new" definition opens the door for you to expense costs far exceeding what was customary in the past. In fact, in most cases - when you use the "new" politically correct definition - you would almost be given a limitless number of times you can raise your deduction limit - assuming a few minor and easily documented things are done. Running some numbers I was able to eliminate all taxes in one particular situation. Granted this would not apply to every situation but a reduction of income taxes by 50% should not be a problem.

Assuming all this can be easily documented and fully meets the definition in the tax code would you feel comfortable exploiting this to the fullest even though you know they surely didn't mean to word it the way they did - but it IS? And its more PC.

Jo, I'm following you. I haven't studied it in awhile, but you may want to take a look at this: http://www.law.cornell.edu/cfr/text/26/1.6664-4
Personally, I would run it past a tax professional and see if it meets the good faith test (or whatever the current buzzword is). You don't want to be too far out on the leading edge of tax law. Likewise, I would be willing to guess that in these days of automation and algorithms, a substantial drop in taxes paid from one year to the next (without a correlating drop in income) might be a computerized automatic red flag and wake up the fine folks with the sharp pencils and calculators. (Not nerds, auditors. Oh wait...).

 

[Commercialfarmer]

Jo, did you start working for the IRS or elected to Congress?

Oh wait, you mentioned something about documentation... copies of your donations to the correct campaigns I bet.

 

[Jogeephus]

I've been smoking this thing over for some time now and I have concluded this was done intentionally and for the reasons I intend on using it. True, the verbiage is a subtle bit of social engineering on Dotgov's part to accomplish something green and silly but it does right something I have always felt was wrong in the tax code - mainly discrimination. Looking at the time frame when the change was made its safe to say its George W. Bush's fault. In fact, I'm almost positive its George's fault when you consider the fact that if you suck on the government's teet you are denied the full use of this. Basically, it boils down to if you are a big boy and go it alone you can expense all of your investment costs rather than having to capitalize them over eight years but if you insist on having Dotgov coddle you then you cannot use it. Sounds an awful lot like George had something to do with this. I think I miss the man. Do you?

 

[WalnutCrest]

I know a little bit about the tax code ... AND ... I slept at a Holiday Inn recently.

So, with that said, do you have a TAX ATTORNEY who is familiar with agricultural finance with whom you could discuss your idea? If so, and you get a big ol thumbs-up from the tax attorney, I would like to subscribe to your newsletter. TIA.

 

[Jogeephus]

I do plan on it. I have enough trouble with Dotgov when everything is filled out and paid on time so I don't need to go stirring the pot.